This is the two stage dust collector I use to remove the dust from my grinding room. I purchased this DustMaster 100 machine second hand from an equipment reseller. To decrease the danger of fire from metal sparks, I have 2” of water in the bottom of the barrel (this is a plastic coated 55gal steel drum used to ship peaches in, which will keep it from rusting). I also use galvanized steel ducting and do not have a dust bag. After the collector, the exhaust is ducted to the outside where an L-piece directs the flow of air and any remaining dust down into a 5gal bucket filled with water. I have checked this a number of times and have found very little dust makes it beyond this outside bucket, let alone past the steel barrel, and only if I really am hogging some wood off.
I still wear a dust mask when grinding. In the future I hope to add an indoor air filter on the ceiling for the fine dust. I have constructed a custom intake shroud for the KMG-1 with space for another drywall-mud tray of soapy water under the wheel. The dust shroud is designed so it will slid in and out to some degree as different grinding wheels are used on the grinder.
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